Another CEO Fired at Benjamin Moore

For the second time in 15 months, Warren E. Buffett has abruptly canned the head of his paint and coatings business.

In a terse, two-line announcement Friday (Sept. 27), Benjamin Moore & Co. said it had parted ways with Chief Executive Officer Robert S. "Bob" Merritt and was shopping for a successor.

"Benjamin Moore, a unit of Berkshire Hathaway, announced today that Robert S. Merritt, Chief Executive Officer and President, is no longer with the firm," said the statement from the 130-year-old architectural coatings manufacturer, based in Montvale, NJ.

Photos: Benjamin Moore

Robert S. Merritt, who joined Benjamin Moore in June 2012, was let go Friday (Sept. 27), the company said.

"The company is undertaking a search for a new Chief Executive Officer and expects to announce a replacement in the coming week."

No reason was given for Merritt's dismissal.

Multiple news reports said the decision to fire Merritt had come directly from Buffett, 83, chairman of Berkshire Hathaway Inc., which owns Benjamin Moore. Buffett, the so-called "Oracle of Omaha," also fired Merritt's predecessor last year.

Both moves were considered a significant departure from Buffett's usual hands-off management style, reports said.

'A Differing View'

Merritt joined Benjamin Moore in June 2012, replacing Denis Abrams, who had helmed the company since 2007. Abrams was vice president of operations for Benjamin Moore when Berkshire Hathaway bought the company in 2000.

The move followed a New York Post report that Buffett had fired Abrams because he had hosted a high-priced cruise to Bermuda for company executives and their spouses at a time of company-wide cost-cutting and layoffs.

A week later, however, Buffett disputed that account in a letter reprinted in the Wall Street Journal. Buffett said in the letter that he had not known of the junket and would not have objected to it anyway.

Former CEO Denis Abram was fired for "a differing view about distribution channels," said Warren Buffett.

Buffett laid the dismissal to "a differing view about distribution channels and brand strategy for the future."

Surprise Dismissal

Abrams' dismissal followed growing complaints from local dealers about how they were being treated, the New York Post reported.

"Abrams forced them to accept exclusive contracts and, according to the dealers, squeezed money from them wherever he could and charged for marketing services without actually providing them," according to an investing site called Value Walk.

Value Walk said Merritt "had been doing a good job rebuilding relationships with local dealers and solving problems left behind by his predecessor, so his firing came as a surprise."

News reports said Merritt's dismissal was announced to employees in a conference call Friday.

'Working at the Carnival'

Merritt came to the paint maker from more than 30 years in the restaurant industry.

He had been chief financial officer of Outback Steakhouse until 2005, when he resigned in anger over “expanding legal and regulatory burdens associated with the Sarbanes-Oxley Act of 2002, a federal law created to prevent a repeat of Enron Corp.-type ethical and financial meltdowns,” the Tampa Bay Tribune reported.

An investor website said ousted Benjamin Moore CEO Robert S. Merritt "had been doing a good job rebuilding relationships with local dealers."

Glassdoor.com, a business site that allows employees to rate their companies, reported Monday (Sept. 30) that Merritt had the approval of just 16 percent of the 54 current and former employees who had posted reviews to the site. Benjamin Moore has about 2,200 employees in New Jersey.

One eight-year employee wrote Sept. 20: "CEO has changed the culture. New regime is cleaning house and eliminating positions only to be filled in again with what they perceive as talent. Many great people have left."

Another employee of more than 10 years wrote Sept. 5 that working for the company was like "working at the carnival"—"ups & downs and not sure what the next big thing is."

Meanwhile, Value Walk reported: "Buffett is normally a hands-off executive with a talent for finding undervalued companies and talented management teams to bring out that value.

"Looking for the third CEO in two years points to deeper problems at Benjamin Moore that may be difficult to fix."